Saving Galileo

The Commission complained that the technical complexity of the project, the time and costs to build it and obstacles posed by the private builders had all been underestimated and that no further delays could be permitted.

The report notes that "five years have been lost already compared to original schedules and at significant costs."

"There have been delays and there can be no more delays," said EU Transport Commissioner Jacques Barrot. "Galileo's potential will not be realized simply because Galileo will arrive too late."

Competing with the US

Comprising 30 satellites, Galileo is meant to compete with the US Global Positioning System (GPS), a free military-run network used widely in cars, boats and aircraft but also in mapping, fisheries and scientific research.

But delays have piled up amid infighting between members of the consortium of private builders which had been expected to construct and manage the project. The eight -- AENA, Alcatel, EADS, Finmeccanica, Hispasat, Inmarsat, TeleOp and Thales -- had been given until May 10 to sort out the mess but that deadline passed with no action.

"This is already the third crisis that we are stuck in," European parliamentarian Ulrich Stockmann told DW-WORLD.DE. "It is scary how we keep postponing the start of operations. First we wanted to be ready by 2008, now we're talking about 2012, while industry is secretly talking about 2014."

Experts fears that a delay in the launch of Galileo could hurt its future, with competition from Russia and China and a high-performance GPS III system which could to go into operation from 2013.

"If Galileo would only come in 2014 or 2015, we would not need it anymore," Galileo expert Carsten Rolle from the German Industry Federation (BDI) told DW-WORLD.DE. "At that point, it would be hard to find a market for it."

A hazardous scenario

Were it to continue to struggle on as planned, the EU report said that the full partnership between the public and private sector in the Galileo project "would not commence before mid-2009 and full deployment would be delayed until 2014 or later."

It said that taking over the project's building phase would provide greater certainty, best use of investment and value for money and get the system up and running more quickly.

"There was a scenario which was a hazardous one," Barrot said. "We will change the scenario to remove the hazardous elements."

Brussels estimates that it could require up to 10 billion euros ($13.6 billion) all tolled in public funds until 2030 -- which includes the 20-year period during which industry will manage the system.

But Barrot said that huge amounts -- about eight billion euros, according to the Commission's estimates -- would be recovered from future revenue.

Civilian control

The system will remain under civilian control but it is possible that the military, security sector or police will be able to use it, bringing in more money.

"We think it will actually turn out cheaper and there will be fewer risks because they will have been clarified," Barrot said. "We will take the risk of construction, but the consortium will have the risk of managing it."

As a fall back option, the EU's executive arm also suggests that the 27 country bloc could fund construction of the first 18 satellites, with industry taking on the rest, if possible. The choice of scenario is due to be made by EU transport ministers at their next formal meeting in Brussels June 7-8.

In the meantime, as Europe awaits this high-technology navigation projects, a separate EGNOS system will enter operation by 2008, improving the quality of GPS signals to pinpoint a location within five meters.